A question I often get from new clients here at Limo Marketer is what kind of return on investment (ROI) they can expect to see with Google Ads. While many variables impact this figure, there are really two major factors that can determine the kind of returns you’ll see on your advertising spend.
Keep reading to learn what they are and how you can improve your ROI on Google Ads.
Transportation Services: Google Ads Costs
A successful Google Ads campaign can attract new leads and help you scale your business, but there’s a lot to know before you dive in. When it comes to determining the ROI your transportation service company gets on its Google Ads campaigns, many factors are at play.
These are the two biggest variables I see that impact ROI on ad spend:
1. Type of Service
If you mainly offer black car services, such as Sedans, SUVs, or CEO/executive-style Sprinters, you might see a lower ROI on ad spend than if you offer high-ticket services like party buses, stretch limos, or limo Sprinters.
If your black car service gets a lot of repeat business, however, the discrepancy will be smaller or non-existent.
2. Lead-to-Sale Conversions
The goal of any ad campaign is to attract potential customers, which I’ll refer to as “leads” in this post. Your lead-to-sale conversion rate looks at how many leads result in actual bookings or sales. This metric can greatly affect your ROI on Google Ads, so it’s important to monitor this number and take steps to improve it.
How Lead-to-Sale Conversions Impact ROI
To understand how the number of leads you convert into actual sales will impact your ROI on ad spending, we need to look at two things: the average ticket price for the transportation services you offer and Google Ads costs.
Here’s an example to illustrate.
Average Ticket Price
Let’s say Bob runs a black car service where the average ticket price for his last 500 runs is $200 per job. Of course, some transportation jobs will be much higher than this, while short runs like airport transportation services might fall in the $100-150 price range. It’s important to use averages, since this will give you a more accurate number.
Conversely, Bill runs a party bus or limo service and has an average ticket price of $500 per job.
Google Ads Costs
The next metric we need to consider is what an operator’s Google Ads costs are. For our purposes today, let’s say both operators start out with a monthly advertising budget of $1,000 per month.
Leads vs. Sales
If an operator has a well-crafted Google Ads campaign, a high-converting landing page, and a solid follow-up protocol with clients, they can typically expect 25-35% of the people who click on their ads to take the next step and call for a quote.
For the next part of our example, let’s say out of 500 ad clicks, 25% of those people take next steps. This means the operator gets an average of 125 leads per month. If they manage to convert 10% of those leads into actual sales, they’ll book 12.5 jobs per month.
Here’s the ROI they’ll get on their ad spend:
- Bob’s Black Car Service — With an average ticket price of $200 and 12.5 jobs per month, Bob makes $2,500 after spending $1,000 on Google Ads. Bob spent roughly 40% of his revenue on advertising.
- Bill’s Limo/Party Bus Service — With an average ticket price of $500 and 12.5 jobs per month, Bill makes $6,250 after spending $1,000 on Google Ads. Bill only spent roughly 15% of his revenue on advertising, which means Bill gets a better ROI on his Google Ads.
I’ll note here that the numbers in this example are ideal numbers — you’re not necessarily going to get these numbers if you are just starting your own Google Ads campaign or if a Google rep sets one up for you. Working with a marketing expert can make all the difference.
How to Increase Lead-to-Sale Ratios
Even if an operator has an excellent online marketing campaign, without a solid follow-up strategy, they’ll likely have a lower lead-to-sale conversion rate, which will shrink their ROI on ad spending.
The best way to convert more leads into actual sales or bookings is to follow-up quickly, consistently, and through a highly deliverable medium, like automated texting.
Let’s say the operators in our example above still get 125 leads per month, but with SMS follow-up they manage to increase their lead-to-sale conversion rates from 10% to 33%. Out of 125 leads, a 33% conversion rate amounts to about 42 jobs per month (up from 12.5 in the previous example).
Here’s how this change impacts their ROI on Google Ads:
- Bob’s Black Car Service — With an average ticket price of $200 and 42 jobs per month, Bob makes $8,400 after spending $1,000 on Google Ads. This time, Bob only spent a little over 10% of his revenue on advertising (down from 40% in the previous example).
- Bill’s Limo/Party Bus Service — With an average ticket price of $500 and 42 jobs per month, Bill makes $21,000 after spending $1,000 on Google Ads. This time, Bill only spent roughly 5% of his revenue on advertising (down from 15% in the previous example).
Based on these numbers, it’s easy to see that your lead-to-sale close rate is crucial to long-term success and being profitable. Another takeaway is that black car service operators may want to consider adding a limo or party bus service to their business, as this yields a much higher average ticket price, making it easier to scale your business.
Tips to Get Repeat Transportation Clients
One variable that works in a black car service operator’s favor is that they are more likely to get repeat clients. This ultimately increases the ROI they’ll get on their ad spend, so whichever transportation service you provide, it’s worth investing some time into building a pool of repeat clients. Here are a few quick tips to help you get started.
- Stay in touch/follow-up via text, email or phone calls
- Deliver excellent, memorable service
- Send out a text blast every 4-8 weeks
- Foster relationships with repeat clients
- Reach out to say thanks
Transportation Marketing Services
Setting up and maintaining consistent, effective marketing campaigns can feel like a full-time job. When you work with marketing experts or invest in marketing training for yourself, you can free up essential hours and level up your business while you’re at it.